How Yello CEO Walter B grew Yello to $52.7M revenue and 600 customers in 2024.

hello everybody my guest today is jason weingarten he's the co-founder and ceo of yellow a talent acquisition software a company to simplify the hiring process his vision for reinventing the way companies acquire talent has helped yellow grow an impressive client roster the software powers recruitment initiatives for the world's largest brands including 110 of the fortune 500. jason you ready to take us to the top let's do it okay so are you hyper focused on kind of fortune 500 as you know this is a very fragmented space and i'm curious if you've gained ground because of that focus um we're hyper focused on helping recruiting teams love their work that is first and foremost what we do and what we've found is that the recruiting teams at the enterprise don't necessarily have the the tool sets that they need to be truly successful um and so that's where life has taken us there are two kind of models though behind this one is that hey we need a critical hire that's the cio that's x google but also worked in oil and gas in dallas and then there's the other version of that which is mcdonald's is a fortune 500 brand their turnover is really high and then they're hiring you know a hundred thousand people a year which kind of sector are you serving more yeah so that's why it goes back to the recruiting teams um you know it's not an individual executive recruiter that's just doing like a single big fill obviously those are critical and we use them here at yellow but we we help the large recruiting teams make sure that they are more strategic and less tactical more strategic and less tactical okay got it um walk me through kind of how you price the product right so is this a pure place sas company or do you have any kind of like you know 30 percent of first year pay kind of thing so it's a it is a sas play um and we model based off of usage um we define usage as the products that they're utilizing um on our platform the regions in which they're utilizing it and uh different segments like they're using it for campus recruiting versus um lateral hires okay campus versus lateral interesting now do you do any um you said you have upsells based on features regions i assume there's some kind of upsell based off just volume of hires through the platform is that accurate usage correct that's what you define usage as okay well what if um um so usage can be a bunch of different things depending on where you put in the funnel is it number of kind of intros you send them or actual number of hired where do you put the level so usage is is often typically by volume and complexity of that volume so for instance um you know if it's a about a company that needs to have um 10 000 hires that year obviously that's going to be significant volume it may be 100 hires but they're going through 5 000 interviews so we take a look and we see where where's the place that we can make where we can provide the greatest level of efficiency and we really focus on on efficiency interesting because of the episode is short we won't go down every customer cohort but on average what would you say kind of a sweet spot is for you in terms of you know what a company might pay you per year for the tech so it really depends um and i know that's probably not the greatest answer in the world but uh we have companies that pay us in the tens of thousands and the hundreds of thousands and the seven figures yeah so it really uh again it goes back to that usage and and how we can ensure that their team is most efficient but you can look at your total customer base look at the total hires or intros you send them per year divide and kind of get an average i mean are we talking 100 a year or a hundred thousand a year i'm sorry the uh with the average error no no sorry in terms of like intros right like i'm trying to get a sense of it if it's a hundred per year or a hundred thousand pre or a million per year so and again that it kind of depends on on the customer base but uh if i were to segment it we have um some of our large enterprise that we'll look at um doing uh thousands of interviews a year we have one customer that did over a hundred thousand interviews okay and so it it it's not necessarily the intro itself um like because the recruiters will get that themselves through recruitment marketing and other focuses but it could be specific interviews it could be specific events they attend it could be um campaigns that they send so it really we like to sell to the enterprise in the way that in the way in which they want to buy yeah and um and it's usually based off what problem we're trying to solve let me ask this differently we have a lot of people listening right now that are growing their teams very very fast what is too small for you what should i mean are they talking they should be doing 100 interviews per year and spending 100 grand on recruiting kind of software what's the minimum for you so we typically look at um what we'll call a large enterprise as our sweet spot customer but uh we have customers that have as few as a 1500 employees that are utilizing the software and they're probably replenishing or growing it called 10 um from a head count standpoint and cost wise that'd be like a 10 000 acv kind of thing no we're we're a premium product so i mean uh it we don't typically work that way um so i'd consider ourselves more of a a four seasons type product of uh we're really focusing on wait so jason so what's the number this will this will save us a ton of time i'm like we're like dancing right now are we talking like a hundred thousand dollar minimum spend on recruiting kind of tools or what no i again that that depends and we don't disclose the exact pricing but uh depending on the size and scale we see uh customers that are you know called a a 50k in in that range okay we also some that started uh seven figures it really depends and that that's why if i give you an average number it's not gonna happen no i'm not i'm not i'm asking for a specific story and you're staying really really vague i'm trying to drill down on one cohort and we're still staying vague so that's what i'm trying to do is drill down on one very specific use case so what i just heard you say is there is a use case around a 50 000 acv where a team might be about a thousand or fifteen hundred people and then replenishing ten to twenty percent of that are growing ten to twenty percent of that every year is that kind of a good back of the napkin metric there it depends but i i think uh let's let's move yeah let's move on so let's put this on a timeline when did you launch the company what year launched it 10 years ago uh actually 11 now 2008. that's a hell of a year to launch a company jason what were you thinking that was the best time uh you launched when there's pain especially in the recruiting space yeah we um we got funding in august of 2008 and then uh lehman hit just uh you know six to eight weeks later holy cow hold on let we have to dive on that how much did you raise but right before lehman uh we did a million seed round okay and total today you're at what 40 or something uh around there yeah okay so million right before lehman uh no the investors have they already wired the money when lehman cloud like did they try and say hey i know we signed we can't wire this everything's crashing so here's the fun fact um uh my previous company we had sold uh just a few months prior and we did really well for it was uh fred de luca who's the founder and owner of subway um so that was the only investor there did very well for him he said to my co-founder dan and i what are we doing next we said we got this other idea and um no business plan nothing he just uh he wired us the money that's funny okay good so you had the money then it crashed then what what happened um then it was uh instead of building software for specific customers where that can go wrong uh we built it based off what we thought and knew to be true in the space and it gave us i didn't realize this at the time obviously like you're selling recruiting software in the middle of uh uh companies not recruiting yeah yeah it's uh it's different but it gave us uh you've heard me say the word efficiency a number of times it gave us the ability to work with some of these big brands that we're still hiring um and we didn't have competition because no one was crazy enough or funded to to be able to go after that segment so i i think it gave us a three or four year runway that we've then utilized to create scale interesting you mentioned in the bio you gave me i think 110 of the fortune 500 but how many how many logos how many brands are you working with today total uh we're working with several hundred companies now um and uh one of the companies is a large rpo and they work with uh several hundred themselves so um we're probably about 600 total um large organizations that are utilizing our software and why is this space the specific space of urine so fragmented i mean gut or instincts would tell you that there would be consolidation there would be roll-up but i mean i've interviewed probably 15 people in this space why is there some all with more than maybe 10 million bucks in ar...